Comprehensive insurance is worth it if the premium is a small percentage of the car’s value. Comprehensive insurance might also be worth it if the policyholder cannot afford to replace the vehicle without comprehensive coverage, or if the car is driven or parked in a particularly risky area.
Although comprehensive insurance is not mandatory in any state, dealerships and lenders frequently require comprehensive insurance, along with collision coverage, on leased or financed cars. In that case, comprehensive insurance is definitely worth it, because failing to meet the lender’s or lessor’s requirements could result in expensive force-placed insurance or even repossession.
Factors to Consider When Deciding If Comprehensive Insurance Is Worth It
- Your car’s age, mileage, and value.
- The cost of comprehensive insurance premiums.
- The risk of theft, vandalism, and natural disasters in your area.
- Your ability to pay for repairs or a replacement vehicle out of pocket.
An old rule of thumb recommended dropping comprehensive coverage when a car was five to six years old or had 100,000 miles. But this rule is now outdated, since newer cars have increased longevity alongside higher repair costs. Now, the standard rule is that comprehensive and collision coverage are both worth buying if the combined premium is less than 10% of the car’s value, minus the deductible.
Cost is only one factor, however, so you should also consider how likely you are to file a claim, as well as what would happen to you financially if your car was stolen or destroyed by something other than an accident and you didn’t have coverage. For instance, if theft, animal collisions, or natural disasters are particularly common in your area, you are especially likely to need comprehensive insurance. Similarly, even if your comprehensive premium is 15% of your car’s value, for example, comprehensive insurance might still be worth it if you rely on the car and can’t afford to replace it yourself.
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